MUMBAI: Indian equity markets surged for the third consecutive session on Thursday, with benchmark indices rallying sharply – Sensex up by 1000 points, on the back of easing geopolitical tensions and a sharp drop in crude oil prices.
The BSE Sensex jumped 1,000 points to close at 83,756, while the NSE Nifty gained 304 points to settle just shy of the 25,550 mark at 25,549.
Broader indices mirrored the bullish sentiment in the markets , with the BSE Midcap and Smallcap indices rising 0.59 per cent and 0.42 per cent, respectively.
Investor wealth saw a significant boost, with the BSE’s total market capitalisation climbing by Rs3.42 lakh crore to Rs457.44 lakh crore, up from Rs454.01 lakh crore in the previous session.
Ceasefire eases jitters
The rally was largely fuelled by news of a ceasefire between Israel and Iran, which helped reduce geopolitical risks and sparked a global risk-on mood. This shift in sentiment also helped ease fears of supply disruptions in the oil market.
Brent crude, which had peaked at $79.40 per barrel on June 23, dropped over 15 per cent to $66.76, bringing relief to oil-importing countries like India and improving the inflation outlook.
The bullish sentiment is clearly dominating markets, supported by easing geopolitical tensions, falling crude oil prices, and the RBI’s encouraging commentary on the economy, according to an analyst.
RBI backs resilience
In its latest bulletin, the Reserve Bank of India (RBI) underscored the economy’s resilience amid global headwinds, adding further comfort to market participants.
However, some analysts urged caution, flagging unresolved issues in global trade. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that while the ceasefire has calmed markets, the expiry of a 90-day pause on reciprocal tariffs on July 9 could revive concerns.
“Markets are in risk-on mode now, but the unresolved issue of reciprocal tariffs could limit the sustainability of this rally. A breakthrough in India-US trade negotiations would be a big positive. But any disappointment could weigh on sentiment,” Vijayakumar said.
Outlook hinges on trade talks
While the current rally reflects strong investor confidence, market participants remain watchful of developments in global trade policy, particularly India’s negotiations with the United States.
For now, though, the bulls are in control – riding high on hopes of stability in geopolitics, supportive macro signals, and softer oil prices.
